Vertiv Holdings Co. (VRT) Failed to Disclose it Would be Impacted by Inflation and Supply Chain Restraints
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Vertiv Holdings Co. (NYSE: VRT) securities between April 28, 2021 and February 23, 2022, for violations of the Securities Exchange Act of 1934. Vertiv purports to be a “global leader in the design, manufacturing and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data.”
According to the complaint, throughout the class period, defendants noted strong net sales growth and increased profits. On April 28, 2021, the Company increased its full year 2021 adjusted operating profit guidance, which purportedly included “the expected negative net impact in the remainder of the year of higher commodity and freight costs.” On October 27, 2021, the Company reported an increase in net sales growth. Though supply chain issues continued, the Company acknowledged, “[c]ost containment actions have been accelerated heading into our fourth quarter to mitigate impacts from increased supply chain disruptions.”
These statements proved to be false. Defendants failed to disclose to investors that the Company could not adequately respond to supply chain issues and inflation by increasing its prices, and that as a result of increasing costs, Vertiv’s earnings would be adversely impacted. On February 23, 2022, Vertiv reported disappointing financial results. Vertiv’s CEO attributed the poor results to management “consistently underestimat[ing] inflation and supply chain constraints for both timing and degree, which dictated a tepid 2021 pricing response.” On this news, the Company’s stock price fell $7.19, or 37%, to close at $12.38 per share on February 23, 2022.
Next Steps: If you acquired shares of Vertiv Holdings Co. (VRT) between April 28, 2021 and February 23, 2022, you have until May 23, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.